Fedex Corporation · NYSE:FDX
Fedex — Q4 2023 Earnings Presentation
17 slides from Fedex's earnings presentation, Jun 20, 2023
Slide 1: FedEx Corporation Fiscal Fourth Quarter 2023 Earnings
FedEx Corporation Fiscal Fourth Quarter 2023 Earnings | June 20, 2023 1 Forward-Looking Statements and Non-GAAP Financial Measures Certain statements in this presentation may be considered forward-looking statements, such as statements regarding expected cost savings, the planned consolidation of op
Slide 2: Presenters: VP of Investor Relations and President & CEO
VP of Investor Relations 3 3 President & CEO 4 4 2
Slide 3: Key messages and results overview
Key messages • Building momentum into FY24 as we swiftly work to transform the global network & drive margin expansion • Announced one FedEx to transform into the world’s most flexible, efficient & intelligent network • Earnings above midpoint of March outlook 5 5 Results overview Delivered Q4 FY23
Slide 4: Progressing on cost reduction plan; Network 2.0
Progressing on cost reduction plan Delivered $2 billion YoY reduction in operating cost in the fourth quarter of FY23 Actions taken: More effectively aligned our flying with demand, with global flight hours down 12% in Q4 FY23 Continued to aggressively manage headcount and hours Permanently retired
Slide 5: Transportation segment revenue performance
EVP & Chief Customer Officer 9 9 Transportation segment revenue performance Remained focused on revenue quality and creating meaningful differentiation while managing through a pressured demand environment -13% -2% $11.9B $10.4B -18% $8.5B $8.3B $2.8B $2.3B Q4 FY22 Q4 FY23 Q4 FY22 Q4 FY23 Q4 FY22 Q4
Slide 6: Transportation segment yield performance; customer experience
Transportation segment yield performance Yield pressured as YoY fuel surcharge comparisons normalized, customer demand shifted, and capacity increased in the international market YoY yield by fiscal quarter 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY
Slide 7: Transportation segment operating income performance
EVP & Chief Financial Officer 13 13 Transportation segment operating income performance Focused on driving improved profitability amid a challenging operating environment +18% -47% -26% $1,004M $984M $849M $519M $602M $448M Q4 FY22 Q4 FY23 Q4 FY22* Q4 FY23* Q4 FY22 Q4 FY23 FedEx Ground FedEx Express
Slide 8: Monthly volume trends; FY24 outlook
Monthly volume trends: Dec. 2022-May 2023 Volume declines continued in Q4 FY23 Q3 average daily volume Q4 average daily volume FedEx Express U.S. Domestic Package YoY FedEx Express International Export YoY Dec Jan Feb Mar Apr May Dec Jan Feb Mar Apr May -2% -3% -4% -4% -10% -8% -12% -11% -13% -12% -
Slide 9: FY24 outlook bridge; lowering capital intensity with higher returns
Illustrative midpoint FY24 outlook bridge *Non-GAAP financial measure; see appendix for more information 17 17 Lowering capital intensity with higher returns to stockholders Unwavering focus on efficient and responsible capital allocation $2.0 Share repurchases 7.6% of 6.8% of <6.5% of revenue reven
Slide 10: Q&A
Q&A Q&A 19 19 Appendix 20 20 10
Slide 11: Q4 FY23 reconciliation for FedEx Corporation and Express
Q4 FY23 reconciliation for FedEx Corporation Diluted Operating Operating Income Net Dollars in millions, except EPS Earnings Income Margin Taxes1,2 Income3 Per Share2 GAAP measure $1,503 6.9% $590 $1,538 $6.05 MTM retirement plans - - (157) (493) (1.94) accounting adjustment4 Goodwill and other asse
Slide 12: FY23 reconciliation for FedEx Corporation and Express
FY23 reconciliation for FedEx Corporation Diluted Operating Operating Income Net Dollars in millions, except EPS Earnings Income Margin2 Taxes1 Income3 Per Share GAAP measure $4,912 5.4% $1,391 $3,972 $15.48 MTM retirement plans - - (157) (493) (1.92) accounting adjustment4 Business optimization cos
Slide 13: Q4 FY22 reconciliation for FedEx Corporation and Express
Q4 FY22 reconciliation for FedEx Corporation Diluted Operating Operating Income Net Dollars in millions, except EPS Earnings Income Margin Taxes1 Income3 Per Share GAAP measure $1,924 7.9% $126 $558 $2.13 MTM retirement plans - - 315 1,003 3.83 accounting adjustment4 FedEx Ground legal matter6 210 0
Slide 14: FY22 reconciliation for FedEx Corporation and Express
FY22 reconciliation for FedEx Corporation Diluted Operating Operating Income Net Dollars in millions, except EPS Earnings Income Margin Taxes1 Income3 Per Share GAAP measure $6,245 6.7% $1,070 $3,826 $14.33 MTM retirement plans - - 379 1,199 4.49 accounting adjustments4 Business realignment costs7 2
Slide 15: FY24 earnings per share and operating income forecast
FY24 earnings per share forecast Dollars in millions, except EPS Adjustments Diluted Earnings Per Share Earnings per diluted share before MTM retirement plans accounting adjustments $15.00 to $17.00 (non-GAAP)9 Business optimization costs 500 Income tax effect1 (120) Net of tax effect $380 1.50 Earn
Slide 16: FY23 free cash flow; FY24 adjusted dividend payout ratio
FY23 free cash flow and adjusted free cash flow Dollars in millions Cash provided by operating activities (GAAP) $8,815 Capital expenditures (6,174) Proceeds from asset dispositions and other 84 Free cash flow (non-GAAP) 2,725 Voluntary contributions to tax-qualified U.S. domestic pension plans 800
Slide 17: Footnotes for non-GAAP reconciliation slides
Footnotes for non-GAAP reconciliation slides 1. Income taxes are based on the company’s approximate statutory tax rates applicable to each transaction. 2. Does not sum to total due to rounding. 3. Effect of “total other (expense) income” on net income amount not shown. 4. The MTM retirement plans ac